A common question we hear from our clients is: “Can I use my VA Loan to buy another home if I already have one home that has a VA Loan on it?”
The answer to this question comes down to your entitlement that is given by the Veterans Administration. As a rough estimate, each veteran is allotted roughly $417,000 in purchasing power with their VA entitlement.
When using your entitlement for a second time, your certificate of eligibility will tell you how much entitlement has been used – which will help you to calculate how much entitlement you have left.
To calculate your remaining entitlement, simply follow this calculation example: Entitlement used on previous loan, subtract this amount from your total entitlement of $104,250 and times this amount by 4 ($40,000-$104,250 x 4 = $257,000). This is your max guarantee from the VA with zero money down. The VA will allow you to purchase for more than this amount but will require you to come in with 25% of any amount beyond your guarantee. In the example above if your new loan amount – including funding fee – is $297,000, to use the VA loan you would need to bring $10,000 in as a down-payment. If your new loan amount is less than $257,000, no down-payment will be required.
As part of their military orders, many of our soldiers and their families will be required to move multiple times during their service. Being able to use your benefit on multiple homes is a valuable resource – one that many veterans and lenders are not aware of.